It is common in Ontario for an individual (the "principal") to appoint a "Power of Attorney" for property ("POA"). A POA for property is a legal document that gives another individual (the "attorney") the authority to act on the principal’s behalf and make decisions relating to their finances and property. Attorneys for property have a fiduciary duty to act honestly and manage the principal’s finances in their best interest. Unfortunately, attorneys for property may abuse their power, act in a self-interested manner, and make decisions that go against the wishes of the principal. An example of such a breach of duty is "misappropriation of funds".
Misappropriation of funds occurs when a person acting as an attorney for property takes or uses the principal’s assets or funds contrary to their best interests. Some examples include:
- Using the principal’s money for personal gain.
- Emptying the principal’s bank accounts.
- Selling or mortgaging properties or assets belonging to the principal without their knowledge or consent.
An attorney for property has a fiduciary duty to keep good records and account for their involvement with the principal’s property. If concerns arise with respect to the attorney’s management of the principal’s funds, interested parties may apply to the Court for an order compelling the attorney to pass their accounts for the principal. This is known as a "passing of accounts". The passing of accounts requires an attorney to pass their accounts before the Court in accordance with the Rules of Civil Procedure. It is an opportunity for a court to review and evaluate how the principal’s finances are being managed. If a court finds that there was misappropriation of funds, they may order the attorney to pay back the money improperly taken and/or managed.
Misappropriation of funds is a serious and difficult issue to deal with alone. Our Estates lawyers at Blackburn Lawyers can help if you suspect if someone acting as an attorney of property for yourself or another individual close to you. You can book a consultation by calling 905-884-9242 or filling out an online consultation request here.
Disclaimer: This blog sets out a variety of information relating to the law that is to be used for educational purposes and is not legal advice for your situation. The author(s) of this blog do not intend the blog to be a source of legal advice.
Written by: Meera Pahwa
* Please note that the information in this article is not intended as legal advice, but rather as a general overview on the subject. If you are seeking legal advice, please consult with a lawyer.
